As home prices climb, borrowers increasingly turn to 100 percent financing and especially loans that sidestep the need for mortgage insurance. One is known as the 80-20 mortgage.

How does it work? The home buyer takes out two loans -- the first for 80 percent and the second for 20 percent of the price. The borrower is expected to come up with the closing costs.

"It allows people to buy without a down payment and also works for those who don't want to touch their savings," says Anthony Hsieh, president of HomeLoanCenter.com.

The main drawback to split loans is that if the house loses value, the owner will owe more than the house is worth.

Many mortgage programs allow you to buy with little or no money down, but they usually require private mortgage insurance, or PMI. Mortgage insurance, which protects the lender from the costs of foreclosing on a house, is generally required when the loan is for more than 80 percent of the home's price.

The way to avoid paying mortgage insurance is by getting a "piggyback loan" -- a second mortgage to back up the first one. The first and main mortgage is for 80 percent, and the piggyback loan is for 20 percent of the home's price, minus any down payment. There are many combinations, such as an 80-15-5 loan. It means the borrower got a main mortgage of 80 percent, a piggyback for 15 percent and a 5 percent down payment.

The interest rate on a piggyback loan is usually higher than the rate on a first mortgage. But the combined payment is usually less than a loan of greater than 80 percent of the home's value plus mortgage insurance. This is especially true if the homeowner itemizes deductions on federal income tax. Mortgage interest is deductible but mortgage insurance is not.

Lenders structure 80-20 loans in many ways. At Hsieh's HomeLoanCenter, the first mortgage generally is a 5/1 ARM, with a fixed rate for the first five years, which adjusts annually after that.

The piggyback loan is a home equity line of credit that changes with the prime rate.

With Countrywide Home Loans, a 20 percent piggyback is always an equity line of credit pegged to the prime rate. The 80 percent first mortgage can be a fixed rate, adjustable rate or interest-only loan.